American Airlines cuts 2026 earnings outlook as fuel costs spike

American Airlines has slashed its 2026 earnings outlook, citing a sharp spike in jet fuel costs that is expected to squeeze profits. The carrier now projects adjusted earnings per share of $1.50 to $2.50 for 2026, down from a prior forecast of $3.00 to $4.00. The revision comes as fuel prices have surged more than 30% since the start of the year, adding billions in unanticipated expenses.

The lower guidance affects American Airlines’ shareholders and employees, as well as travelers who may face higher fares if the airline attempts to offset costs. The company warned that it could even report a loss in the second quarter of 2026 if fuel prices remain elevated. This marks a sharp reversal from earlier optimism, when the airline had expected a strong year driven by robust travel demand.

The news matters because American is one of the largest U.S. carriers, and its struggles signal broader industry pressure from rising fuel costs. Higher jet fuel prices erode margins across the sector, potentially leading to reduced capacity, higher ticket prices, or weaker financial performance for airlines that cannot fully pass on costs. The warning also underscores how volatile energy markets can disrupt corporate planning.

According to the company’s statement, jet fuel now accounts for roughly 30% of its operating expenses. The airline had previously hedged some fuel purchases, but those hedges have not fully insulated it from the recent price spike. American reported a net loss of $545 million in the first quarter of 2026, partly due to fuel costs, and now expects a similar or worse outcome in the current quarter.

Background: American Airlines had been recovering from the pandemic-era downturn, posting profits in 2024 and early 2025 as travel rebounded. However, geopolitical tensions and OPEC+ production cuts have driven crude oil and jet fuel prices higher in recent months. The airline had already trimmed its 2026 capacity growth plans in March, but the new earnings outlook reflects a more severe impact.

Looking ahead, American Airlines said it will continue to monitor fuel prices and may adjust its schedule or cost structure further. Analysts expect the carrier to focus on debt reduction and operational efficiency, but if fuel costs stay high, additional cuts to earnings forecasts or capacity could follow. The company’s next quarterly report is due in July 2026.